Chinese New Year Speech by Chairman Douglas Hsu

　　On the last working day before the Lunar New Year holidays, Far Eastern Group held its traditional Pre-Lunar New Year Gathering. Led by Chairman Douglas Hsu, the management team of affiliated companies reflected upon the operating performance of the previous year, and unveiled the future direction and perspectives.

　　Under the impact of Covid-19, the overall revenues and pre-tax income dropped slightly in 2020. However, total assets continued to increase with healthy financial positioning to ensure future growth momentum.  Looking into 2021, we feel optimistic about earnings of the Group’s listed companies, hopefully to reach new record highs and thanks to our colleague’s joint efforts.

　　Far Eastern Group is marching toward its second phase of next 70th years.  Yet given the current “New Normal” status, we are facing more challenges yet perhaps even more severe ones.  Therefore, we should continue to focus on the followings:

1. Science/Technology：In the era of digital technologies, each company must focus on technological innovation, apply new technologies, and develop new business models.
2. Real Estate Development：There are more than 500,000 pings (around 1.653 million square meters) of land assets under the Group.  For example in Taipei Far Eastern Telecom Park (Tpark), after over 10 years of planning, it has become the first destination of prestigious international corporations in Taiwan, i.e. Google has established its new head office here.  Moreover, the development project in Chungli District is also underway.  In addition to the planned second branch of Far Eastern Memorial Hospital, more construction projects are to be introduced, thus enhance the prospect of these land assets.
3. Group Corporate Structure：Corporate governance of Far Eastern should be divided into “company” and “Group” levels.  Following continuous growth of each company, while number of affiliates and investments have increased significantly, we must have a healthy organizational structure to ensure adequate management oversight.  As for the Group level, we need to have the designated person who is responsible for handling the coordination and communication of public matters, as well as cross-industry collaboration to integrate resources in order to create maximum efficiencies and benefits.
4. Internationalization：The investments of Far Eastern Group spans across China, Vietnam, Japan, U. S. A. and etc.  Foreign language ability is certainly critical, in particular with English as the global common language, our colleague must possess strong English capability.
5. Legal Department：In the era of globalization, legal department of each company should not only have the legal expertise of local laws and regulations in Taiwan, but also have knowledge of international laws and regulations, so as to help various issues in regard to overseas investments and operations.
6. Corporate Spokesman：Far Eastern has been a dedicated corporate citizen with little endorsement.  However, in the time of quick information distribution, each company should set up Corporate Spokesman as the designated contact of open channel to communicate externally in timely response.
7. Environment, Social, Governance（ESG）：The concept of ESG has been adopted globally.  Each company should focus on strengthen its corporate governance to achieve sustainable operations.

　　Furthermore, in the year of 2021 there are still many pending challenges in the world including the Sino-U. S. conflicts, Cross-Strait tension, climate change, the wealth gap, fiscal deficit, etc.  Also, various new normal has appeared post-pandemic era, such as 5G will change every aspect of the life in future.  In particular, the 5G download speed of Far EasTone Telecommunications is ranked as Taiwan’s best by an accredited international mobile network survey, it has also greatly outperformed other telecom players, hopefully to support more smart services in the developments of many industries.  Also, epidemic prevention measures such as social distancing is testing the adaptability of physical stores including department stores and hotels, which highlights the urgency of digitization.  Each store should focus on foot traffic management, environmental sanitation, and also developing the contactless business models to create more digital sales channels.  On the other hand, the Covid-19 pandemic has also exposed the global supply chain crisis, forcing many multi-national corporations to adjust their mindset, and reduce their dependency on globalization.  Otherwise, once anything goes wrong in the process, it will affect the stability of the overall production line.  The importance of environmental protection is already manifested globally, more and more nations and corporations have turned to green energy, Far Eastern Group will also largely increase its demand in green power.

　　We hope that the macro environment will stay peaceful and open to attract talents, capitals, and technologies.  Yet, there is no control of the external environment.  Facing with dynamically changing situation, corporation must remain strong, search for direction to march forward.  Particularly during the post-pandemic period, we should re-establish the operating mindset, Reimagine, Repurpose, and Reinvent our corporations.  Each company is operating in a different environment and needs to look for the right development target, such as to provide the best, or the most differentiated products and services?  Seek for the best profits?  Or the lowest costs?  To grow the quickest in the market?  Or have the largest market share?  Focus on the best management, most innovative technology?  Or focus on most sustainable operating model?  Only with clear objective, can one establish powerful vision, and then define future for the corporation.  There is no doubt in the important role of human resource, HR Department must expedite in training the staff’s foreign language capability, and also strengthen the training of new technologies such as AI, IoT, Big Data, and through cross-department, cross-company rotation to expand the staff’s diversified capabilities to cope with global expansion.  Hope that each company will continue to enhance its competitiveness, transcend science and technology, beyond the local, talent, and profit boundaries to become a major global player.

　　Far Eastern Group has been established for over 70 years, given the pandemic prevention concerns, celebrations were held differently.  We have celebrated by publishing the book titled “Far Eastern Group 70th Anniversary- Philanthropy Roadmap” to let Far Eastern colleagues and the society understand our CSR endeavors by our schools, foundations, hospital, and each enterprise.  These results come from your contributions.  Without your contribution, there will be no Far Eastern of today.  Of course, there is no end of the road in corporate social responsibilities.  Marching toward the next 70 years, we will continue to strive in CSR initiatives, create win-win scenarios for both corporations and the society, and ask you all to work together, propose new concept, new strategy, and demonstrate execution, to write the next chapter of another outstanding 70 years.

#